New Fast-Food Rivalry Hits Big Pizza Chains

By , Special to The Christian Science Monitor

UNTIL recently, the ``Big Three'' pizza chains managed a degree of peaceful coexistence. But now, Pizza Hut, Domino's Pizza, and Little Caesar's are rushing to take a bite out of each other's business.

Slower industry growth, along with ``value pricing'' and ``combo'' meals (combinations of menu items at lower prices) in other sectors of the fast-food industry, have put pressure on pizza chains to measure up. The result: new services, new products, and new prices.

``In the last few years, we've been getting into each other's territory,'' says Tim McIntyre, spokesman for Domino's Pizza in Ann Arbor, Mich.

Recommended: Could you pass a US citizenship test?

The three leaders each had their own niche: Pizza Hut as a table-service restaurant, Domino's Pizza as a delivery chain, and Little Caesar's as carry-out only. But each chain is making changes.

``Value is paramount now,'' says Wendy Webster of the National Restaurant Association (NRA) in Washington. The recession, along with the advent of hamburger combo meals such as those at McDonald's, ``threw a loop into the process'' of pizza's growth, Ms. Webster says.

As a result, ``this summer was a promotion battleground,'' says Gerry Durrell, editor and publisher of Pizza Today magazine in New Albany, Ind.

The ``battle of the big pizzas,'' such as Domino's 300 square-inch carry-out-only ``Dominator,'' and Pizza Hut's slightly smaller ``Bigfoot,'' represented the pizza industry's efforts to offer good value meals.

The largest chain, Pizza Hut, based in Wichita, Kan., has even tried offering a month of free HBO cable television with the purchase of a Bigfoot pizza.

``It's a way of bringing extra value to the product,'' says Rob Doughty, Pizza Hut's vice president of marketing communications. Until this year, Pizza Hut ``had not been participating in the value market,'' Mr. Doughty says.

The 9,800-store worldwide chain with $5.7 billion annual sales is also ``renewing its focus'' on its Tuesday-night ``kids eat free'' offer, Doughty says.

Carry-out service used to be dominated by Detroit-based Little Caesar's, which introduced value pricing by offering two pizzas for the price of one, says spokeswoman Sue Sherbow.

But pizza is no longer enough: Little Caesar's recently introduced spaghetti and salads. The 4,600-store chain with $2.3 billion annual sales has doubled its number of stores in the last four years and is vying for Domino's No. 2 spot in the pizza industry.

Domino's has long resisted expanding its menu, promising 30-minute delivery. But ``customers' needs have changed,'' Domino spokesman Mr. McIntyre says. ``They want more than pizza.''

Since November 1992, Domino's has added six new menu items, including sandwiches, breadsticks, and salads at most of its 5,200 stores nationwide, and has promoted carry-out for the Dominator.

Even though NRA data collected two years ago showed pizza-chain sales were closing in on burger restaurants, Mexican and Asian fast-food restaurants have been growing at a faster rate. Between 1989 and 1992 traffic at Mexican and Asian restaurants grew 39 percent and 55 percent respectively. During the same period pizza grew a modest 8 percent, according to a 1992 survey by NPD/CREST Annual Household Reports of Parkridge, Ill.

Share this story:

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...